Swiss National Bank President: Inflation Outlook Remains Highly Uncertain

Swiss National Bank President Heinz Schlegel said on Wednesday that uncertainty surrounding Switzerland's inflation outlook is "quite high," and close attention needs to be paid to whether the impact of the Middle East conflict triggers a second round of inflation. Schlegel stated that the rise in energy costs caused by the Middle East conflict is likely a supply shock. "But we must watch for a second round of effects very closely, and if we see signs of a second round and inflation is too high, then central banks should act early and decisively," Schlegel said. Schlegel reviewed the Swiss National Bank's latest monetary policy decision in March, when it kept the benchmark interest rate at zero while slightly raising its inflation forecast for this year to 0.5%. He also noted that the Swiss National Bank's latest forecast shows that inflation will remain within the target range of 0% to 2% until 2028. "But clearly, the uncertainty surrounding this inflation forecast is quite high at present. Therefore, given the Middle East conflict, our willingness to intervene in the foreign exchange market has increased," Schlegel said.